If knowlege is power, reading this blog will empower you, I hope. I'm a generally inquisitive kind of guy. I like to know what is happening, and I like to analyze why it's happening. So, I've been studying our southwest Kansas, Ulysses and Hugoton home markets closely. In this blog I'll talk specifically about our small residential real estate market. I'll share some insights into why homes sell, why they don't. I'll share strategies for helping your home sell well, or to help you make a good purchase decision. I am not the all-knowing all-being REALTOR, however I've been in this industry for quite some time. Plus, I took a statistics class once in college; so surely that qualifies me.?
First let's discuss our southwest Kansas market in general. It's not large, not event average in size. Compared to the rest of the nation we're a tiny market with a very rural location. We don't have a typical Buyer or Seller, but our Buyers and Sellers are every bit as unique as those looking for a 3rd floor walk-up in New York, just different. When you start to look at raw data generated from our local southwest Kansas MLS system you can draw some disturbing conclusions if you don't understand our market. In a small real estate market, like Ulysses or Hugoton, you can have large fluctuations from month-to-month. It is not unlikely to see fluctuations of over 100% from month-to-month. This is because we average around 50 homes sold per year in Ulysses, Kansas; or about 4 per month and even fewer in surrounding communities like Johnson, Kansas or Satanta, Kansas. Sell only two homes one month and you've got one scary home inventory statistic. The point being, take the time to work with a qualified professional who understands the market and knows what to draw from all of the information that is available at the push of a button these days. So, now that you understand the size of our housing market and it's impact on home sales statistics, let's dive in.
Ulysses, Kansas Market Snapshot:
Homes Sold last 12 months: 50
Average Days on Market: 91
Average % of List Price: 95.82
Average Sales Price: $114,011
Median Sales Price: $91,000
Most Popular Price Range: $80,000-$89,999
Price Range Selling Fastest: $30,000-$39,999 & $60,000-$69,999 (23 & 49 days)
Most Popular Bedroom Count: 3 bedrooms (19 sales)
From this informaiton there are some clearly standout statistics. The fact that our average days on market is 91 days is fabulous. This takes into account the real stinkers on the market, some homes that have sat for over a year. Compare this to any large market during this same time frame and we look very good. Additionally, it's nice to know that homes are selling at nearly 96% of list price. We can derive two conclusions from this. Our homes are being priced by professionals and the professionals are generally correct. When homes are selling quickly, they sell close to the list price and vice-versa.
What's more difficult to determine from these sales statistics? For one, the average sales price. In the last 12 months, not a single home sold between $100,000 & $120,000 according to MLS. However, some (4) did sell around the media of $91,000. What this does let you know, is that homes in our area tend to be more affordable than the national average and don't count on getting exactly the average. As you can see, there were many more homes sold around $85,000 and surprisingly serveral around $140,000-$159,999. We have a strong market and we're seeing our top end extend as well. Last year we had 18% of our homes selling above $180,000 with the highest recoreded sales between $250,00-$299,999.
Not surprisingly, our two swiftest home price ranges were lower price ranges. This price range is one that investors purchase in and also first-time buyers. The competition for a limited quantity of affordable homes catapulted this market to an average marketing time of between 23 and 49 days! In fact this small two bedroom home market had an average marketing time of 56 days compared to 116 days for 5+ bedroom homes. Little homes typically sell more quickly here.
One should note that I'm writing this blog right at the begining of what is traditionally considered the "busy" season (spring of 2012). So the past 12 months included last spring's busy season. We should see an increase of sales and hopefully inventory. I am convinced that there is currently more demand in many price ranges than supply to satisfy them. People are waiting for the right home. This is further substantiated by the fact that the average marketing time is shorter than average in many price ranges and homes are selling closer to list price.
One shouldn't ignore one other very important ingredient in our housing market- the lack of rental property! There are very few homes available for rent at any given time in Ulysses and Hugoton. These are small markets that see large homeowner turnover. Our energy companies are constantly shuffling people in and out of the area, some for short term. The availabilty of relocation and transfer packages have enable many to buy, however many more are not willing to take that risk. So, the market for rental is hot. The cost of building a new home in southwest Kansas most typically is much higher than our average used home price. Therefore, two things happen, we have fewer new home starts for single family dwellings and we have fewer investors willing to hang their neck out, for a slim cashflow, to build rental properties like apartments, condos, townhomes or duplexes.
To be continued...
A note on Zillow and other real estate statistics websites: Zillow is a fun website that became wildly popular in the last 5 years. This site is so popular because it allows the consumer to snoop around a market and draw a conclusion on the value of a home easily. Zillow provides what they've billed as "Zestimates" of value for any home in America. One important fact must be pointed out about homes in Kansas. To my knowledge, Zillow is not allowed sales information for Kansas. Unlike some states, like Colrado, Kansas is not an open-record state. You can't go online or to your local court house and find out what your neighbor paid for their home. So, while Zillow is a great shopping tool and can give you a glimpse of the market, don't go to market on a guess- contact a professional.
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